Excess withholding of social security and railroad retirement
tax.(p237)

Social security tax and tier 1 railroad retirement (RRTA) tax were both withheld during 2018 at a rate of 6.2% of wages up to $128,400. If you worked for more than one employer and had too much social security or RRTA tax withheld during 2018, you may be entitled to a credit for the excess withholding. See
Credit for Excess Social Security Tax or Railroad Retirement Tax
Withheld, later.

The credit for alternative fuel vehicle refueling property has expired for refueling property placed in service after 2017. However, some persons who received an alternative fuel vehicle refueling property credit from a fiscal year partnership or fiscal year S corporation may be able to claim the credit. See
Alternative Fuel Vehicle Refueling Property Credit, later.

The alternative motor vehicle credit expired for vehicles purchased after 2017. However, if you purchased the vehicle in 2017, but placed it in service during 2018, you may still be able to claim the credit for 2018. See
Alternative Motor Vehicle Credit, later.

The credit for qualified two-wheeled plug-in electric vehicles expired for vehicles acquired after 2017. However, you may be able to claim this credit if you acquired the qualified two-wheeled vehicle in 2017 and placed it in service during 2018. See
Plug-in Electric Drive Motor Vehicle Credit, later.

Beginning in 2018, you can claim this credit for contributions you make to an ABLE account of which you are the designated beneficiary. See Pub.
907, Tax Highlights for Persons with Disabilities, for more information.

The first part of this chapter,
Nonrefundable Credits, covers 10 credits that you subtract from your tax. These credits may reduce your tax to zero. If these credits are more than your tax, the excess isn't refunded to
you.

The second part of this chapter,
Refundable Credits, covers three credits that are treated as payments and are refundable to you. These credits are added to the federal income tax withheld and any estimated tax payments you made. If this total is more than your total tax, the excess may be refunded to
you.

You may be able to take a tax credit of up to $13,810 for qualified expenses paid to adopt an eligible child. The credit may be allowed for the adoption of a child with special needs even if you don't have any qualified
expenses.

If your modified adjusted gross income (AGI) is more than $207,140, your credit is reduced. If your modified AGI is $247,140 or more, you can't take the credit.

An eligible child is a child with special needs if all three of the following
apply.

The child was a citizen or resident of the United States (including U.S. possessions) at the time the adoption process
began.

A state (including the District of Columbia) has determined that the child can't or shouldn't be returned to his or her parents'
home.

The state has determined that the child won't be adopted unless assistance is provided to the adoptive parents. Factors used by states to make this determination
include:

The child's ethnic background;

The child's age;

Whether the child is a member of a minority or sibling group;
and

Whether the child has a medical condition or a physical, mental, or emotional
handicap.

The state must make a determination that a child has special needs before the child is considered to be a child with special needs. A child having a specific factor or condition isn't enough to establish that the state has made a determination of special needs.

Generally, until the adoption becomes final, you take the credit in the year
after your qualified expenses were paid or incurred. If the adoption becomes
final, you take the credit in the year your expenses were paid or incurred. See
the Instructions for Form 8839 for more specific information on when to take the
credit.

If the child isn't a U.S. citizen or resident at the time the adoption process
began, you can't take the credit unless the adoption becomes final. You treat
all adoption expenses paid or incurred in years before the adoption becomes
final as paid or incurred in the year it becomes final.

Figure your 2018 nonrefundable credit and any carryforward to 2019 on Form 8839
and attach it to your Form 1040. Include the credit in your total for Schedule 3
(Form 1040), line 54. Check box c and enter "8839" on the line next to that box.

An alternative motor vehicle is a vehicle with at least four wheels that qualifies as a qualified fuel cell vehicle.

The alternative motor vehicle credit expired for vehicles purchased after 2017. However, if you purchased the vehicle in 2017, but placed it in service during 2018, you may still be able to claim the credit for
2018.

At the time this publication went to print, Congress had not enacted legislation on expired provisions. To find out if legislation has been enacted, go to Recent Developments at
IRS.gov/Pub17.

A qualified fuel cell vehicle is a new vehicle propelled by power derived from
one or more cells that convert chemical energy directly into electricity by
combining oxygen with hydrogen fuel, and that meets certain additional
requirements.

Generally, you can rely on the manufacturer's certification to the IRS that a
specific make, model, and model year vehicle qualifies for the credit and the
amount of the credit for which it qualifies. In the case of a foreign
manufacturer, you generally can rely on its domestic distributor's certification
to the IRS.

Ordinarily, the amount of the credit is 100% of the manufacturer's (or domestic distributor's) certification to the IRS of the maximum credit
allowable.

To take the credit, you must complete Form 8910 and attach it to your Form 1040.
Include the credit in your total for Schedule 3 (Form 1040), line 54. Check box
c and enter "8910" on the line next to that box.

Don't report vehicles purchased after 2017 on Form 8910 unless the credit is
extended.

The credit for alternative fuel vehicle refueling property has expired for refueling property placed in service after
2017.

However, if you are a partner in a fiscal year partnership or a shareholder of a fiscal year S corporation, you may receive an alternative fuel vehicle refueling property credit for 2018. See the instructions for your Schedule K-1 for details on how to claim the
credit.

At the time this publication went to print, Congress had not enacted legislation on expired provisions. To find out if legislation has been enacted, go to Recent Developments at
IRS.gov/Pub17.

You generally can choose to take income taxes you paid or accrued during the year to a foreign country or U.S. possession as a credit against your U.S. income tax. Or you can deduct them as an itemized deduction (see
chapter 23).

You can't take a credit (or deduction) for foreign income taxes paid on income that you exclude from U.S. tax under any of the
following.

Unless you can elect not to file Form 1116 (see
Exception, later), your foreign tax credit can't be more than your U.S. tax liability (the total of Form 1040, line 11a, and Schedule 2 (Form 1040), line 46, multiplied by a fraction. The numerator of the fraction is your taxable income from sources outside the United States. The denominator is your total taxable income from U.S. and foreign sources. See Pub.
514 for more information.

You don't have to complete Form 1116 to take the credit if all of the following
apply.

All of your foreign source gross income was "passive category income" (which includes most interest and dividends) and all of that income and the foreign tax paid on it were reported to you on qualified payee statements such as Form 1099-INT and Form 1099-DIV (or substitute
statements).

You held the stock or bonds on which the dividends and interest were paid for at least 16 days and weren't obligated to pay these amounts to someone
else.

You aren't filing Form 4563 or excluding income from sources within Puerto
Rico.

The total of your foreign taxes wasn't more than $300 (not more than $600 if married filing
jointly).

All of your foreign taxes were:

Legally owed and not eligible for a refund or reduced tax rate under a tax treaty,
and

Paid to countries that are recognized by the United States and don't support
terrorism.

You may be eligible for the credit if you were issued a qualified Mortgage
Credit Certificate (MCC) from your state or local government. Generally, an MCC
is issued only in connection with a new mortgage for the purchase of your main
home.

Figure your credit on Form 8396. If your mortgage loan amount is equal to (or
smaller than) the certified indebtedness (loan) amount shown on your MCC, enter
on Form 8396, line 1, all the interest you paid on your mortgage during the
year.

If your mortgage loan amount is larger than the certified indebtedness amount shown on your MCC, you can figure the credit on only part of the interest you paid. To find the amount to enter on line 1, multiply the total interest you paid during the year on your mortgage by the following fraction.

If the certificate credit rate is more than 20%, the credit you are allowed
can't be more than $2,000. If two or more persons (other than a married couple
filing a joint return) hold an interest in the home to which the MCC relates,
this $2,000 limit must be divided based on the interest held by each person. See
Pub.
530 for more information.

Your credit (after applying the limit based on the credit rate) is also subject
to a limit based on your tax that is figured using Form 8396. If your allowable
credit is reduced because of this tax liability limit, you can carry forward the
unused portion of the credit to the next 3 years or until used, whichever comes
first.

If you are subject to the $2,000 limit because your certificate credit rate is more than 20%, you can't carry forward any amount more than $2,000 (or your share of the $2,000 if you must divide the
credit).

If you itemize your deductions on Schedule A (Form 1040), you must reduce your
home mortgage interest deduction by the amount of the mortgage interest credit
shown on Form 8396, line 3. You must do this even if part of that amount is to
be carried forward to 2019. For more information about the home mortgage
interest deduction, see
chapter 24.

If you received an MCC with your mortgage loan, you may have to recapture (pay
back) all or part of the benefit you received from that program. The recapture
may be required if you sell or dispose of your home at a gain during the first 9
years after the date you closed your mortgage loan. See the Instructions for
Form 8828 and
chapter 15 for more information.

The tax laws give special treatment to some kinds of income and allow special deductions and credits for some kinds of expenses. If you benefit from these laws, you may have to pay at least a minimum amount of tax in addition to any other tax on these items. This is called the alternative minimum tax.

The special treatment of some items of income and expenses only allows you to postpone paying tax until a later year. If in prior years you paid alternative minimum tax because of these tax postponement items, you may be able to take a credit for prior year minimum tax against your current year's regular tax.

You may be able to take a credit against your regular tax if for 2017 you had:

An alternative minimum tax liability and adjustments or preferences other than exclusion
items,

Figure your 2018 nonrefundable credit (if any), and any carryforward to 2019 on
Form 8801, and attach it to your Form 1040. Include the credit in your total for
Schedule 3 (Form 1040), line 54, and check box b. You can carry forward any
unused credit for prior year minimum tax to later years until it is completely
used.

You may be able to take this credit if you placed in service for business or personal use a qualified plug-in electric drive motor vehicle in 2018 and you meet some other
requirements.

The credit for qualified two-wheeled plug-in electric vehicles expired for vehicles acquired after 2017. However, you may be able to take the credit if you acquired the vehicle in 2017 but placed it in service for business or personal use in 2018. See the Instructions for Form 8936 for more information.

At the time this publication went to print, Congress had not enacted legislation on expired provisions. To find out if legislation has been enacted, go to Recent Developments at
IRS.gov/Pub17.

Is propelled to a significant extent by an electric motor that draws electricity from a battery that has a capacity of not less than 4 kilowatt hours and is capable of being recharged from an external source of electricity, and

Is propelled to a significant extent by an electric motor that draws electricity from a battery that has a capacity of not less than 2.5 kilowatt hours and is capable of being recharged from an external source of electricity,
and

Generally, you can rely on the manufacturer's (or, in the case of a foreign manufacturer, its domestic distributor's) certification to the IRS that a specific make, model, and model year vehicle qualifies for the credit and, if applicable, the amount of the credit for which it qualifies. However, if the IRS publishes an announcement that the certification for any specific make, model, and model year vehicle has been withdrawn, you can't rely on the certification for such a vehicle purchased after the date of publication of the withdrawal
announcement.

The following requirements must also be met to qualify for the
credit.

You are the owner of the vehicle. If the vehicle is leased, only the lessor, and not the lessee, is entitled to the
credit.

You placed the vehicle in service during 2018.

The vehicle is manufactured primarily for use on public streets, roads, and
highways.

The original use of the vehicle began with you.

You acquired the vehicle for your use or to lease to others, and not for resale.

To take the credit, you must complete Form 8936 and attach it to your Form 1040.
Include the credit in your total for Schedule 3 (Form 1040), line 54. Check box
c and enter "8936" on the line next to that box.

Don’t report two-wheeled vehicles acquired after 2017 on Form 8936 unless the credit is
extended.

You may be able to claim the residential energy efficient property credit if you made energy saving improvements to your home located in the United States in
2018.

Note.
If you are a member of a condominium management association for a condominium
you own or a tenant-stockholder in a cooperative housing corporation, you are
treated as having paid your proportionate share of any costs of the association
or corporation.

The nonbusiness energy property credit has expired. At the time this publication went to print, Congress had not enacted legislation on expired provisions. To find out if legislation has been enacted, go to Recent Developments at
IRS.gov/Pub17.

You may be able to take a credit of 30% of your costs of qualified solar
electric property, qualified solar water heating property, small wind energy
property, geothermal heat pump property, and fuel cell property. Include any
labor costs properly allocable to the onsite preparation, assembly, or original
installation of the residential energy efficient property and for piping or
wiring to interconnect such property to the home.

However, you can't take the credit if either of the following
applies.

The amount on Form 1040, line 7, is more than $31,500 ($47,250 if head of household; $63,000 if married filing
jointly).

The person(s) who made the qualified contribution or elective deferral: (a) was born after January 1, 2001, (b) is claimed as a dependent on someone else's 2018 tax return, or (c) was a student (defined
next).